SALT LAKE CITY — A former Utah County businessman now charged in two fraud cases has been ordered to stand trial and won't be allowed to post bail.
Alan Dean McKee, 56, appeared not in his usual suit and tie but in shackles and a blue Salt Lake County Jail uniform for a preliminary hearing Wednesday.
McKee, whose company was once named Utah County Business of the Year, was charged this month with one count each of communications fraud and theft, both second-degree felonies.
Prosecutors allege McKee was pulling and selling track from a stretch of rail line he didn't own, even after he was charged in February in an alleged development fraud scheme alongside former Utah County Commissioner Gary Jay Anderson.
In the first case, McKee is accused of impersonating high-ranking officials of The Church of Jesus Christ of Latter-day Saints to legitimize the project.
Third District Judge Vernice Trease denied bail for McKee, raising concern that the alleged crimes may have been committed to pay his legal fees.
"There's no question that Mr. McKee, in his conduct as recent as this month, has become more and more egregious," Trease said. "The very reason I suspect he's out there trying to get money is to pay his bail."
Arguing for bail to be denied, prosecutor Brian Williams noted similarities between the allegations in both cases and argued that stringent release requirements including wearing an ankle monitor didn't discourage his actions.
Williams also raised concerns that granting McKee bail again could allow him to commit new crimes, making him a threat to the public.
"Danger can be more than physical; it can be financial," Williams told the judge. "This is basically a financial disaster for all the people involved in this project"
In testimony Tuesday, witnesses described the deal made with McKee in September 2015 when he approached Ronald Mattinson, owner of R&R Equipment and a partner with McKee on another project, about pulling up a section of track on the Tintic Rail Line near Elberta.
"I understood that he either owned it or had the rights to it," said Mattinson, who came back to McKee with a bid the next day.
Mattinson brought in Gary Applegate, the owner of Greenbox Recycling, and together they began pulling rail line, ties, spikes and plating from the stretch of track, most of which was sold to other companies.
Work continued until May when the Utah County Sheriff's Office and Union Pacific Police Department were called to the site, informing the crew from the two companies that they were trespassing and needed to stop their work immediately.
Union Pacific Police Lt. Brent Nay testified that the railroad company owned all of the inactive stretch of track. He got a call later that day from McKee, who said he had been in negotiations to buy the stretch of track for years and had documentation to prove it.
Nay said he asked McKee to send copies of the paperwork to the department, as well as to Union Pacific's real estate and legal offices. It never came, despite several more calls from McKee in the weeks that followed claiming the paperwork was simply delayed.
Union Pacific police estimates the loss of the seven miles of track, between materials taken and damage done, at $175,000.
R&R and Greenbox were left with outstanding contracts to sell the materials collected from the rail line. Applegate, who had agreed to sell railroad ties to Home Depot, said he ended up scrambling to buy ties at a higher rate from providers in other states to avoid defaulting on the deal.
Aaron Peterson, vice president of Peterson Holdings, said his company had agreed to purchase 13 miles of track from the project to use in its industrial yard. About 2 miles of track has been laid, he testified, while another 4 miles' worth sit untouched at the stalled site.
In his previous case, McKee was charged in February, along with Anderson, with three counts of communications fraud and one count of engaging in a pattern of unlawful activity, all second-degree felonies.
Both men have been ordered to stand trial. They are accused attempting to get Minnesota-based Ames Construction to invest in a large industrial park in the same area near Elberta, which they called the Tintic Rail Line.
Through letters, emails and phone calls, investigators say McKee impersonated officials with the LDS Church in effort to push Ames from 2012 to 2014 to pay out between $300,000 and $400,000 that Ames board member Mark Brennan was told would "get the project going."
McKee told Ames the project was backed by the LDS Church and Suburban Land Reserve, a real estate development arm of the church.
David Cannon, vice president of Suburban Land Reserve, testified at a preliminary hearing that McKee had originally approached the firm about the Elberta project, but by mid- to late-2012, the church division told him it was no longer interested.
In February, an LDS Church spokesman called the alleged fraud a "brazen scheme."
Anderson's attorney, Nathan Crane, has claimed Anderson was also duped by McKee, investing $110,000 from his own retirement funds with the businessman, and was not complicit in the scheme.
Both men are scheduled to appear in court next on Sept. 23.
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